In order to prevent the risks associated with the scalability and centralization of the Ethereum blockchain, Vitalik Buterin recently proposed 3 new consensus approaches. These proposals aim to reshape Ethereum’s current Proof of Stake mechanism, in order to effectively respond to a potential increase in the number of validators.
Vitalik Buterin proposes 3 new consensus approaches for Ethereum
In a recent post on ethresear.ch, Ethereum founder Vitalik Buterin proposes changes to the network’s Proof of Stake (PoS) consensus mechanism
In his proposal, Vitalik presents 3 approaches to prevent overloading Ethereum’s PoS consensus mechanism in the event of a significant increase in new validators. These 3 methods would aim to reduce network load and simplify signature verification.
A PoS simplification proposal: make a design that only requires 8192 signatures per slot (even with SSF), making the consensus implementation considerably simpler and lighter.https://t.co/Z8mK7vZx7g
– vitalik.eth (@VitalikButerin) December 27, 2023
Vitalik’s initiative aims to facilitate the integration of a larger number of validators on the network in order to make it more decentralized, alleviating the constraints imposed by Ethereum’s consensus. Currently, to help secure the network, each validator must stake 32 ETH (around $76,800), a hefty sum that has earned Ethereum much criticism for being perceived as a centralized and selective network compared to other blockchains.
In summary, Vitalik suggests limiting the number of signatures required to 8,192 per slot by adopting 1 of the following 3 approaches:
- The 1st approach would be to increase the minimum staking amount to 4,096 ETH, or $9.8 million. Although seemingly contradictory to the intentions mentioned earlier, this approach would put an end to individual stakers and allow the network to operate mainly via staking pools;
- The 2nd approach would combine the previous approach with the staking approach currently in use. Consisting of 2 layers of stakers: a “heavy” layer with a minimum staking of 4,096 ETH, accessible via staking pools, and a “light” layer with no minimum deposit, in which at least 50% of stakers would participate in the validation of new blocks;
- The 3rd approach, on the other hand, would not increase the minimum deposit but would select a group of 4,096 active validators, adjustable to penalize defaulting or malicious validators.
The disadvantages of each approach
While each of the 3 approaches seems in theory to be effective in making block validation more efficient and ETH staking more accessible, they nevertheless have several drawbacks that can increase network centralization.
The 1st approach, far from ideal, could generalize a phenomenon of centralization already observed with Ether liquid staking, where over 9 million ETH are staked on the Lido platform (LDO), representing over 75% of staked Liquid Ether. Such a generalized centralization of all staked ETH could compromise network security.
The 2nd approach would split validators into 2 distinct categories, creating a power imbalance between stakers. On one side the “heavy” stakers, on the other the “light” stakers with less than 4,096 ETH. This approach favors a concentration of power among the richest entities.
The 3rd approach seems fairer, in that it would enable individual stakers to be retained, the minimum ETH requirement to be reduced and the number of validators to be increased. However, the implementation of such a mechanism could add complexity to the consensus, making it more vulnerable.
